Over the past several months oversight of the COVID-19 Uninsured Program (UIP) by both the Health Resources and Services Administration (HRSA) and the HHS Office of Inspector General (OIG) has ramped up. This increase in activity may be due to an OIG report issued in July of 2023 that stated, “[o]n the basis of our sample results, we estimated that nearly $784 million of $4.2 billion (or 19%) of UIP payments made to providers during our audit period for approximately 3.7 million of 19.2 million patients were improper.”

In its response to the OIG audit report, HRSA states, among other things, that it will seek to recover improper payments to providers. In addition to the ongoing audits by the HHS OIG, the Division of Program Integrity of HRSA’s Provider Relief Bureau has recently begun random assessments of providers that received UIP funds using its team of contract audit firms.

Central to the July OIG report are the terms and conditions that providers agreed to in order to bill the UIP fund for COVID testing and vaccine administration. UIP terms and conditions state that providers, prior to billing the UIP fund, “… certifies that to the best of its knowledge, the patients identified on the claim form were Uninsured Individuals at the time the services were provided.” This provision on certification of uninsured status is at the heart of the July OIG report. In the report, the OIG, while recognizing that COVID as a national health emergency, suggests strongly that providers and HRSA could have done a better job of verifying status as uninsured.

In addition, the OIG has recently started audits of other providers including Health Centers focused on another, and rather unusual, provision of the terms and conditions. This provision concerns the use of UIP payments and states:

The Recipient certifies that it will not use the Payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. If the Recipient subsequently receives reimbursement for any items or services for which the Recipient requested Payment from the Uninsured Program Fund, the Recipient will return to HHS that portion of the Payment which duplicates payment or reimbursement from another source.

What is unusual about this provision is that it effectively turns what is a fee-for-service payment into a cost-reimbursement program like a federal grant or cooperative agreement.

We strongly recommend that your organization review the UIP terms and conditions, protocols for determining uninsured status as well as determine the amount of UIP payments received and how those funds were used and consider strategies to document, among other things, how your organization determined uninsured status and how it can document use of UIP funds.

If you have received an audit or financial review notice or if you have questions concerning your expenditures of UIP funds, please contact Edward T. Waters, Managing Partner, at 202.466.8960 or ewaters@feldesman.com.